Emerald Management Review:
Social composition, social conflict and economic development

Abstract:

Purpose - To define the impact on economic growth, of social groups that appropriate resources without sanction.

Design/methodology/approach - Divides a society into groups (e.g. ethnic groups) that compete with each other over resources, some of which are more appropriable than others. Models an economy , or with two groups of equal size that contest for resources rather than produce using capital. Assumes that the marginal return to fighting increases with the number of groups. Considers consumption and investment. Looks at the possibility of peace and growth, or of stagnation and conflict. Modifies to cover asymmetric goups, and looks at predatory minorities and the Matthew Effect (where the rich gain more and the poor lose more). Adds social elites and mass resistance.

Findings - Finds that, where there are symmetric groups, economic growth is only possible under peace, when investors cannot also be appropriators. In an asymmetrical society, a large investing peaceable group can coexist with an aggressive minority. Where a country is rich in resources, shows falling economic growth triggers a cycle of appropriations.

Research limitations/implications - Proposes a dynamic macroeconomic model with an index of fractionalization. Includes Markov and trigger strategies, and a multi-layered society. Questions the stability of preferences.

Originality/value - Presents an imaginative and intriguing new model of social structure, of value to researcher and student of political economy.

Keywords:

Article Type:

Conceptual paper

Reference:

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